Greek Bailouts: The Sale of a Nation and the Death of Democracy

When the European Union (EU) and the International Monetary Fund (IMF) came to Greece’s rescue in May 2010 with a 110 billion euro bailout loan in order to avoid the default of a eurozone member state (a second bailout loan worth 130 billion euros was activated in March 2012 and a third one was signed in August 2015), the intentions of the rescue plan were multifold.

First, the EU-IMF duo (with the IMF in the role of junior partner) wanted to protect the interests of the foreign banks and the financial institutions that had loaned Greece billions of euros. Greece’s gross foreign debt amounted to over 410 billion euros by the end of 2009, so a default would have led to substantial losses for foreign banks and bondholders, but also to the collapse of the Greek banking system itself as the European Central Bank (ECB) would be obliged in such an event to refuse to fund Greek banks.

Second, by bailing out Greece, the EU wanted to avoid the risk of negative contagion effects spreading across the euro area. A Greek default would have led to a financial meltdown across the euro area and perhaps to the end of the euro altogether.

Third, with Germany as Europe’s hegemonic power, there was a clear intention to punish Greece for its allegedly “profligate” ways (although it was large inflows of capital from the core countries that financed consumption and rising government spending), and by extension, send out a message to the other “peripheral” nations of the eurozone of the fate awaiting them if they did not put their fiscal house in order.

Fourth, the EU wanted to take the opportunity presented by the debt crisis to turn Greece into a “guinea pig” for the policy prescriptions of a neoliberal Europe. Berlin and Brussels had long ago embraced the main pillars of the Washington Consensus — fiscal austerity, privatization, deregulation and destatization — and the debt crisis offered a golden opportunity to cut down the Greek public sector to the bare bones and radicalize the domestic labor market with policies that slash wages and benefits and enhance flexibilization and insecurity.

The first three goals of the Greek bailout plan have been achieved, while the fourth one is an ongoing and permanent process since Greece has now been turned into a neo-colony, where the primary and virtually exclusive obligation of the national governments (whether left or right) is to repay the bail-out loans in full.

This involves enforcing draconian austerity measures and carrying out a blanket privatization program, spanning from rail and road transport to airports and seaports, from water utilities to electricity distribution, from gaming to mining, and from land to pristine seashores, while the coastal and forestry bills drafted by the Finance and Tourism Ministries under the Samaras government were described by WWF (World Wild Fund) Greece as being “ecologically criminal.”

In July 2011, the Greek government established a privatization fund, the Hellenic Republic Asset Development Fund, or TAIPED, for “the divestment of the private assets of the public sector.”

Hardly surprising, TAIPED was an idea pushed forward by the EU chiefs and modeled after Germany’s Treuhandanstalt, the agency which, as formal owner of all former assets of the German Democratic Republic (GDR), oversaw the privatization of thousands of state-owned enterprises in East Germany after the collapse of the communist regime.

For those who may not know of the economic history of Germany’s unification, Treuhand’s essential role was to organize the looting of East German industry and public wealth.

Like Treuhand, TAIPED’s sole purpose is to sell state-owned assets.

However, unlike Treuhand, which was governed by public law and was technically subject to control by parliament, TAIPED is governed by private law and is unaccountable to the Greek parliament, with parliament members even being denied access to minutes of TAIPED’s board meetings.

Hardly surprising therefore that prosecutors have already filed charges against TAIPED’s administration for embezzlement. This is the normal outcome of privatizing public assets and doing away with accountability and democracy.

Indeed, make no mistake about the intentions of those who enact savage methods of alleged “economic efficiency” and privatization.

In the ideological worldview of fanatical neoliberals, which is the political crowd that dominates today’s European integration project, privatization is not a means, but an end in itself.

While the experience with privatization varies between countries, and certain privatization projects can have positive results, scores of empirical studies show that privatization increases neither efficiency nor competition, but does lead to price increases for consumers and to higher costs for the government, while corruption and embezzlement have been perceived as being closely linked to privatization.

However, this is the age of predatory capitalism, of the expansion of commodification into all aspects of political, economic and social life and of the onslaught on the social contract.

For contemporary political leaders in Greece and the EU, democracy is just a catch phrase. Their actual role is to cater to the needs of an elite system, a plutocracy thriving on the impoverishment of a multitude, to the whims of financial vultures that accumulate massive amounts of wealth by subjecting entire nations to a regime of debt peonage.

Democracy in contemporary Greece has suffered massive blows. Indeed, by rephrasing Rosa Luxemburg’s famous quip on social democracy, one can say that since the international bailout of 2010, Greek democracy “has been a stinking corpse.”

Greece, the land that gave birth to democracy and whose ancient culture laid the foundation for Western civilization, is now a nation for sale. Having fought heroically in World War II against both Mussolini’s and Hitler’s armies (inspiring Winston Churchill to say that “until now, we knew that Greeks were fighting like heroes; from now on we shall say that the heroes fight like Greeks”), contemporary Greece has lost its sovereignty under peacetime conditions, courtesy of a German-led EU and its own obsequious, servile, cowardly and oleaginous political leaders.

Any hope for recovery from the austerity-caused depression and the reclaiming of national sovereignty and dignity lies squarely with the people. Whether this materializes or not remains to be seen, but the prospects are grim. Democracy has already been laid to rest and the nation’s entire patrimony is now on sale.